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Vonage Holdings Corp (NYSE:VG)
Beneish M-Score
-2.46 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Vonage Holdings Corp has a M-score of -2.46 suggests that the company is not a manipulator.

VG' s Beneish M-Score Range Over the Past 10 Years
Min: -5.34   Max: 0.99
Current: -2.46

-5.34
0.99

During the past 13 years, the highest Beneish M-Score of Vonage Holdings Corp was 0.99. The lowest was -5.34. And the median was -2.99.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Vonage Holdings Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.3742+0.528 * 1.0547+0.404 * 1.0776+0.892 * 1.0677+0.115 * 0.9315
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9488+4.679 * -0.0938-0.327 * 1.0343
=-2.46

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $33.3 Mil.
Revenue was 248.359 + 233.675 + 226.824 + 230.124 = $939.0 Mil.
Gross Profit was 152.391 + 149.245 + 148.608 + 153.014 = $603.3 Mil.
Total Current Assets was $124.8 Mil.
Total Assets was $955.3 Mil.
Property, Plant and Equipment(Net PPE) was $49.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $71.2 Mil.
Selling, General & Admin. Expense(SGA) was $455.8 Mil.
Total Current Liabilities was $186.3 Mil.
Long-Term Debt was $324.9 Mil.
Net Income was 9.078 + 0.897 + 7.931 + 3.406 = $21.3 Mil.
Non Operating Income was -0.495 + 0.104 + 0.154 + -0.247 = $-0.5 Mil.
Cash Flow from Operations was 26.694 + 23.989 + 14.572 + 46.105 = $111.4 Mil.
Accounts Receivable was $22.7 Mil.
Revenue was 223.36 + 221.858 + 219.73 + 214.533 = $879.5 Mil.
Gross Profit was 147.961 + 149.432 + 148.687 + 149.881 = $596.0 Mil.
Total Current Assets was $144.1 Mil.
Total Assets was $795.7 Mil.
Property, Plant and Equipment(Net PPE) was $48.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $58.3 Mil.
Selling, General & Admin. Expense(SGA) was $449.9 Mil.
Total Current Liabilities was $178.1 Mil.
Long-Term Debt was $233.5 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(33.259 / 938.982) / (22.669 / 879.481)
=0.03542027 / 0.02577543
=1.3742

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(595.961 / 879.481) / (603.258 / 938.982)
=0.67762806 / 0.6424596
=1.0547

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (124.763 + 49.791) / 955.288) / (1 - (144.135 + 48.063) / 795.661)
=0.81727605 / 0.75844235
=1.0776

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=938.982 / 879.481
=1.0677

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(58.309 / (58.309 + 48.063)) / (71.194 / (71.194 + 49.791))
=0.54816117 / 0.58845311
=0.9315

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(455.753 / 938.982) / (449.911 / 879.481)
=0.48536926 / 0.51156421
=0.9488

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((324.928 + 186.279) / 955.288) / ((233.515 + 178.149) / 795.661)
=0.53513391 / 0.51738617
=1.0343

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(21.312 - -0.484 - 111.36) / 955.288
=-0.0938

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Vonage Holdings Corp has a M-score of -2.46 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Vonage Holdings Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.10840.89120.80990.86121.01481.19451.17150.98570.8661.084
GMI 1.0160.84320.950.97221.02740.97151.04940.97030.96651.0334
AQI 0.83673.2811.49660.98070.61972.9950.90571.13381.11551.0093
SGI 2.25631.36361.08680.98770.99550.98340.97560.97641.0481.0302
DEPI 0.59820.64170.76760.89210.92341.13870.99360.86940.80270.9147
SGAI 0.71040.8570.68150.90440.891.02120.99821.07651.00330.9389
LVGI 0.7811.43771.12750.99851.28070.31630.87971.15231.0351.0192
TATA -0.19730.0081-0.1108-0.1147-0.56640.4862-0.152-0.0931-0.1072-0.1354
M-score -2.17-1.54-2.94-3.17-5.340.99-3.03-2.99-3.07-2.99

Vonage Holdings Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.91030.96580.8661.04831.12061.01191.0840.94421.35631.3742
GMI 0.9870.99020.96650.96790.97130.98331.03341.03791.04641.0547
AQI 1.23451.16841.11551.02651.05391.08011.00931.05511.10361.0776
SGI 1.02351.04091.0481.03231.01871.01611.03021.03951.04961.0677
DEPI 0.72980.8690.80270.85620.90390.95950.91470.96190.97530.9315
SGAI 1.03190.9711.00330.9730.96550.98180.93890.95240.97650.9488
LVGI 1.04511.07931.0351.11141.08151.18491.01920.99051.17821.0343
TATA -0.1269-0.1334-0.1072-0.1035-0.1136-0.1125-0.1354-0.147-0.111-0.0938
M-score -3.10-3.07-3.07-2.95-2.91-3.02-2.99-3.13-2.62-2.46
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